iTunes Sells 24% of All U.S. Music

Apple's iTunes Music Store now sells 25 percent of all music sales in the U.S., and 69 percent of the entire US digital music market. Relative newcomer AmazonMP3 sells just 8 percent of all U.S. digital music downloads.

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Artwork: Chip Taylor
Market research company The NPD Group reports that while CDs remain the most popular format for paid music purchases, digital music sales are making up an ever-greater share of US music sales. (See also "Apple iTunes: How to Organize and Manage Your Music Collection.")

CDs comprised 65 percent of all music sold in the first half of 2009 compared to paid digital downloads, which comprised 35 percent of music sales. By comparison, paid digital music downloads comprised just 20 percent of sales in 2007 -- growing to 30 percent of the music market last year.

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"Many people are surprised that the CD is still the dominant music delivery format, given the attention to digital music and the shrinking retail footprint for physical products," said Russ Crupnick, vice president of entertainment industry analysis.

"But with digital music sales growing at 15 to 20 percent, and CDs falling by an equal proportion, digital music sales will nearly equal CD sales by the end of 2010."

According to NPD MusicWatch, when it comes to the unit-sales volume of music sold at retail -- including paid digital music downloads and CDs -- Apple iTunes leads in the US with 25 percent of music units sold -- up from 21 percent in 2008 and 14 percent in 2007.

Walmart (including Walmart, Walmart.com, Walmart Music Downloads) remains in second position with 14 percent of music volume sold at their stores and Web sites with Best Buy ranked third.

iTunes also continued to solidify its lead in the digital music arena, as consumer downloads from iTunes comprised 69 percent of the digital music market in the first half of 2009, followed by AmazonMP3 at 8 percent.

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Walmart leads all sellers of CDs with a 20 percent share of the physical music market, followed by Best Buy at 16 percent and Target and Amazon tied at 10 percent each.

"The growth of legal digital music downloads, and Apple's success in holding that market, has increased iTunes's overall strength in the retail music category," said Crupnick.

"But the importance of the big box retailers shouldn't be dismissed, as long as the majority of music consumers continue to buy CDs."

The is from NPD's consumer tracking of US consumers, age 13 and older, who reported their purchases of physical product (CDs), digital music, and wireless over-the-air (OTA) transactions -- excluding ringtones. In addition, NPD only tracks digital music tracks and albums sold a-la-carte, not music purchased under subscription.

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